Your Town/Address should be set to completely bogus information, with only the web site information filled out for your Fan Page and your blogs/Websites. All areas indicated by a red dot should have all data removed. Your core group of friends is perfectly aware of these personal details already.
Cleansed Profile View
Here is what my "Cleansed" Profile now looks like.
This is what Facebook's new Privacy settings area looks like. The "Recommended" settings are still too permissive.
FaceBook Privacy Settings Optimized
This is what your Privacy Settings screen should look like when properly optimized. Take note of the "Customize Settings" link, you'll need to make changes in there so your settings come out looking like this.
Things I Share
This is what you want your effective rights to look like in "Customize Settings" for Things I Share.
Things Others Share and Contact Information
This is what you want your effective rights to look like in "Customize Settings" for Things Others Share and Contact Information.
Game and Application Settings
These sections need your attention.
Applications, Games and Websites
Make sure nothing is checked under Applications, Games and Websites.
Make sure you opt out of the Instant Personalization Program.
This is what you want your settings to look like under Directory Information. The areas with the checkmarks are what I consider to be mandatory for optimal levels of privacy. The rectangle selected areas are at your discretion.